Which of the following best illustrates why a bond is a type of loan?
A) The issuers of bonds make regular payments to bondholders.
B) When a company issues a bond, the buyer of that bond becomes an owner of the issuing company.
C) Funds raised are used to finance long-term projects.
D) When an investor buys a bond from an issuer, the investor is giving money to the issuer, with the assurance that it will be repaid at a date in the future.
Answer: D
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